Mass. unemployment rate drops to 7.3 percent

By Megan Woolhouse, Globe Staff

Employers in Massachusetts cut jobs for the second consecutive month in September, a sign that the state’s economy is slowing.

The state’s Executive Office of Labor and Workforce Development reported today that employers cut 2,300 jobs last month, after shedding more than 10,000 in August. The Massachusetts unemployment, however, rate fell to 7.3 percent from 7.4 percent in August, the lowest unemployment rate in nearly three years and well below the national average of 9.1 percent.

But economists said decline in the unemployment rate in recent months is a sign of difficult job market as discouraged job seekers have stopped looking for work and are no longer counted as unemployed. The state’s labor force has decreased by nearly 21,000 since the beginning of the year.

“It looks like the state’s economy is slowing and will continue to slow for the remainder of the year,” Clayton-Matthews said. “I don’t expect any net job growth over the rest of the year, but I don’t expect job losses like we’ve seen in the past couple of months.”

Job growth and unemployment statistics sometimes diverge because the estimates are based on different surveys. Job statistics come from a survey of employers, who report the number workers on payrolls.

The unemployment rate is estimated from a survey of households, which includes a broader segment of the job market. This survey includes contract workers, self-employed, and other workers not on company payrolls.

Andrew Mayer, senior vice president of research at Associated Industries of Massachusetts, a trade group, said the pace of job creation in Massachusetts has slowed since the beginning of the year.

“The job creation numbers are not good,” Mayer said. “It’s a weak labor market … and this is happening at a time when household incomes are not strong.”

The Massachusetts economy has performed better than the nation as a whole since the recession ended in 2009. The state has reported job gains of about 38,000 this year, but Clayton-Matthews said those estimates could be overstated, and eventually revised downward.

Job losses last month were spread across several sectors, including leisure and hospitality, which shed 2,300 jobs; retail, which lost 1,800 jobs; and financial activities, which lost 800 jobs.

Still, key sectors of the state economy, including education, health care, and professional, scientific and business services, added jobs. Professional, scientific, and business services, which include a variety of technology and scientific research firms, added 1,500 jobs in September, the 10th consecutive month of gains in that sector.

Education and health care services added 500. Information, which includes telecommunications and software publishers, added 5,200 jobs as Verizon employees returned to work after striking in August.

A separate report published yesterday predicted job growth in New England will lag the rest of the nation through 2017. IHS Global Insight, a Lexington forecasting firm, predicted employment will grow an average of about 1 percent a year in Massachusetts and much of New England, compared to about 1.5 percent nationally.

IHS regional economist Michael Lynch said the analysis found that it would take New England about three years to regain the jobs lost in the last recession. Other areas, such as the Southeast, will rebound more quickly because of faster population growth, which leads to economic growth.

Even with slow job growth, IHS Global Insight predicts Massachusetts’ unemployment rate will drop to 5.7 percent by the end of 2017.

“Slower downturn, slower recovery,” Lynch said of New England’s slow job growth. “The region certainly weathered the storm better, but a softer downturn means a less robust recovery.”